Indian Economy-News & Updates

[Khajur]

China says no but US, Japan help ADB clear India’s plan


Posted: Tuesday , Jun 16, 2009 at 0421 hrs IST
New Delhi:


Despite strong dissent from China, India scored a major diplomatic victory at the Asian Development Bank board meeting today as all other members voted in favour to grant approval for the $2.9-billion India plan.

China had blocked a consensus because it contained $60-million watershed development projects in Arunachal Pradesh.

It’s reliably learnt that China was the lone dissenter at today’s meeting and voted against the India plan that covers the period for the next three years until 2012, arguing that ADB cannot fund projects in “disputed areas” like Arunachal Pradesh.

India, of course, countered that the ADB was not the forum to discuss these issues and that the state is an integral part of India.

The success at the ADB, sources said, was a result of a massive diplomatic effort which saw India sending demarches to all key countries. The scales finally tilted when US, the country with the maximum voting share, came out in India’s favour.

It’s learnt that last week Finance Minister Pranab Mukherjee held a meeting in North Block with External Affairs Minister S M Krishna where it was decided that demarches be sent to all 66 countries represented in the ADB.

Specific attention was given to the US, Japan and South Korea, which control large voting shares in the Bank. Assurances were won and detailed explanations were provided to those who had doubts.

The ADB clearance comes a day before the PM meets the Chinese President Hu Jintao at Moscow where both leaders are attending the SCO well as the BRIC (Brazil, Russia, India and China) summits.

While the two leaders are unlikely to let this confrontation in the ADB come in the way of broader deliberations, sources said, the Chinese intransigence at the ADB has definitely left a sour taste.

Pakistan voted in India’s favour but not before it made a statement on how the ADB should have a policy on funding in “disputed areas”.


It’s learnt that Beijing had been leaning on Islamabad to show solidarity but the latter was constrained by the fact that its own plan has certain projects in the Northern Areas. Given its larger voting share, India could have created roadblocks for Pakistan’s plan in case it supported China. Moreover, Pakistan had no alternate funding arrangement.

Since March last week, when China first raised the objection, India had been lobbying hard with the ADB to rule out Chinese objections on the grounds that the Bank could not entertain bilateral disputes. However, the growing Chinese clout had ADB writing to India that it must find ways through bilateral channels to get Beijing to remove its objection.

China says no but US, Japan help ADB clear India’s plan

 

[PeacefulIndian]

There was a huge thread on this which turned ugly later on & was closed. Anyway, matter well discussed if not masticated.

 

[Khajur]

There was a huge thread on this which turned ugly later on & was closed. Anyway, matter well discussed if not masticated.

This news article is about the latest development in ADB loan row with china.I dont know u if some member had already posted this piece of news on a separate thread.

 

[wtf]

iajdani, that's a good way of explaining it. I never thought of it from supply side.

But I think what has happened is that supply of high value items, like houses have exceeded demand. Since house purchases are often financed by loans, one could say that we borrowed from future to build more houses than needed. That caused a temporary glut. Also the supply of some items (like software, services) may have exceeded demand. Further, supply of labour in some sectors has gone up with some people returning from Gulf, US etc.

 

[Joshi]

There is already a thread devoted to the growing Physical Infrastructure of India. But this one is for a more integrated element of growth of any nation - Its People. No ordinary People. But people with extra-ordinary guts, to make the difference of whatever it takes.

India is often called 'a country with no Government'. So what is it that makes it possible to march a big bullock cart of 1.17 billion people at the rate of 9%+ growth rate? How is it possible for a continent to stand united as a country and march uni-directionally? What is it that despite so many ethnic differences, religions, language barriers, internal fractions and more that what ever problem a country can be diseased of, still people rise up, to be worshipped, and acknowledeged by the whole world?

So the answer is that a country where it's government sleeps, people wake up and lead the charge. Be it in India, or anywhere around the world, they have made a mark. This thread is for those extra-ordinary people.
.
.

 

[Joshi]

Mohandas Karamchand Gandhi​

Mohandas Karamchand Gandh (2 October 1869 – 30 January 1948) was the pre-eminent political and spiritual leader of India during the Indian independence movement. He was the pioneer of satyagraha—resistance to tyranny through mass civil disobedience, firmly founded upon ahimsa or total non-violence—which led India to independence and has inspired movements for civil rights and freedom across the world. Gandhi is commonly known around the world as Mahatma Gandhi (Sanskrit: महात्मा mahātmā or "Great Soul", an honorific first applied to him by Rabindranath Tagore) and in India also as Bapu ("Father"). He is officially honoured in India as the Father of the Nation; his birthday, 2 October, is commemorated there as Gandhi Jayanti, a national holiday, and worldwide as the International Day of Non-Violence.

Christ gave us the goals and Mahatma Gandhi the tactics.

— Martin Luther King Jr, 1955

In 1931, notable European physicist Albert Einstein exchanged written letters with Gandhi, and called him "a role model for the generations to come" in a later writing about him.

Finally, prior to becoming President of the United States, then-Senator Barack Obama noted that:
Throughout my life, I have always looked to Mahatma Gandhi as an inspiration, because he embodies the kind of transformational change that can be made when ordinary people come together to do extraordinary things. That is why his portrait hangs in my Senate office: to remind me that real results will come not just from Washington – they will come from the people.

 

[Joshi]

Indian American kids who have won Scripps National Spelling Bee​

6 out of last 11 Scripps National Spelling Bee champions are the kids of Indian Immigrants.

1999 Nupur Lala
2002 Pratyush Buddiga
2003 Sai R. Gunturi
2005 Anurag Kashyap
2008 Sameer Mishra
2009 Kavya Shivashankar

Anurag Kashyap


Kayya Shivashankar.

 

[Joshi]

Rabindranath Tagore​

Rabindranath Tagore (7 May 1861 – 7 August 1941), was a Bengali polymath. He was a poet, visual artist, playwright, novelist, educationist, social reformer, nationalist, business-manager and composer whose works reshaped Bengali literature and music in the late 19th and early 20th centuries. He became Asia's first Nobel laureate when he won the 1913 Nobel Prize in Literature.

Tagore was famed throughout much of Europe, North America, and East Asia. He was key in founding Dartington Hall School, a progressive coeducational institution; in Japan, he influenced such figures as Nobel laureate Yasunari Kawabata. Tagore's works were widely translated into English, Dutch, German, Spanish, and other European languages by Czech indologist Vincenc Lesný,French Nobel laureate André Gide, Russian poet Anna Akhmatova, former Turkish Prime Minister Bülent Ecevit and others. In the United States, Tagore's popular lecturing circuits (especially those between 1916–1917) were widely attended and acclaimed.

 

[Joshi]

J R D Tata​

​

In 1929 Tata got the first pilot license issued in India. He later came to be known as the father of Indian civil aviation. He founded India's first commercial airline, 'Tata Airlines', in 1932, which in 1946 became Air India, now India's national airline.

He was awarded the Legion d'honneur, by the French Government in 1954. In 1979, Tata was the recipient of the Tony Jannus Award for his distinguished contributions to commercial aviation. He also received the prestigious Guggenheim Medal for aviation in 1988. He was conferred India's highest civilian award Bharat Ratna in 1992 for his service to industry and nation building. In the same year, he was also bestowed with the United Nations Population Award for his crusading endeavors towards initiating and successfully implementing the family planning movement in India, much before it became an official government policy.

 

[Joshi]

C. V. Raman​

​

Sir Chandrasekhara Venkata Raman, (7 November 1888 – 21 November 1970) was an Indian physicist and Nobel laureate in physics recognised for his work on the molecular scattering of light and for the discovery of the Raman effect, which is named after him.

He was elected a Fellow of the Royal Society early in his career (1924) and knighted in 1929. In 1930 he won the Nobel Prize in Physics. In 1954 he was awarded the Bharat Ratna. He was also awarded the Lenin Peace Prize in 1957.
India celebrates National Science Day on 28 February of every year to commemorate the discovery of the Raman effect in 1928.

 

[Joshi]

A. P. J. Abdul Kalam​

Avul Pakir Jainulabdeen Abdul Kalam born October 15, 1931, Tamil Nadu, India, usually referred to as Dr. A. P. J. Abdul Kalam, was the eleventh President of India, serving from 2002 to 2007. During his term as The President, he was popularly known as the People's President, and a poll conducted by news channel CNN-IBN named him "India's Best President".

Before his term as India's president, he worked as an aeronautical engineer with DRDO and ISRO. He is popularly known as the Missile Man of India for his work on development of ballistic missile and space rocket technology. In India he is highly respected as a scientist and as an engineer.

Kalam played a pivotal organisational, technical and political role in India's Pokhran-II nuclear test in 1998, the first since the original nuclear test by India in 1974.

On Wednesday April 29, 2009, he became the first Asian to be bestowed the Hoover Medal, America's top engineering prize, for his outstanding contribution to public service. Kalam has received honorary doctorates from as many as thirty universities, including the Carnegie Mellon University and the Nanyang Technological University of Singapore

 

[Joshi]

R. N. Kao​

Rameshwar Nath Kao (1918-2002) was a spymaster and the first chief of India's external intelligence agency, the Research and Analysis Wing (R&AW) from its founding in 1969 to 1977. Kao was one of India's foremost intelligence officers, and helped build R&AW. An intensely private man, Kao was rarely seen in public after his retirement. A very cautious and reserved person, throughout his life, he was photographed only twice.

One of the two photographs:-

He held the position of Secretary (Research) in the Cabinet Secretariat of the Government of India, which has been held by all R&AW directors since. He also founded the Aviation Research Centre (ARC) and the Joint Intelligence Committee.

Former chairman of Joint Intelligence Committee K.N. Daruwala has said:
"His contacts the world over, particularly in Asia—Afghanistan, Iran, China, you name it—were something else. He could move things with just one phone call. He was a team leader who rode out notorious inter-departmental and inter-service rivalries, which is commonplace in India."

 

[Screaming Skull]

India's April fiscal deficit at $11 bln: Govt​

23 Jun 2009,

NEW DELHI: India's fiscal deficit in April was at 541.58 billion rupees ($11 billion), or 16.3 percent of the full-year target, the government said in a statement on Tuesday. Tax receipts were at 74.62 billion rupees while expenditure were at 662.17 billion rupees for the first month of 2009/10 fiscal year.

 

[Screaming Skull]

Investment boom under threat as fiscal deficit soars​

22 Jun 2009,

The five years preceding FY09 were illustrious for the Indian economy. India Inc was at the fore front of this growth bonanza, with revenues and profits growing at a record pace. This was duly appreciated by the equity investors, who bid the stock prices to record levels.

As is evident from the charts, the growth was largely led by investment demand, which is captured by the gross domestic fixed capital formation in national income accounts. According to figures provided by the Central Statistical Organisation (CSO), India’s investment rate reached an all-time high of nearly 39% during the year ended March 2008. In FY03, only a quarter of the country’s GDP was invested to create future growth.

While the burgeoning foreign investment –both direct and portfolio investment –did play a role, the rise in investment was largely domestic financed. From a low of 23.6% in FY02, India’s savings rate jumped to a record high of nearly 38% in FY08. This fuelled an unprecedented investment boom, raising the demand for all sorts of investment-related goods, cement, metals, commercial vehicles, financial services, equipment & machinery among others. This, in turn, had a multiplier effect on related sectors and India ended up as one of fastest growing economies in the world.

What caused this surge in savings? The answer lies buried in the balance sheets of India Inc and their public sector counterparts. Help also came from declining fiscal deficit, both at the centre and state levels. Between FY02 and FY08, the combined gross saving rate of the two sectors jumped from 1.62% of GDP to 13.3%.

During the same period, the household sector savings rate remained stagnant at around 24% of the GDP. The inference is clear, the bounce in domestic capital formation was largely financed by the corporates and commercial enterprises in the public sector through their own resources.

How were corporates and PSUs able to scale up their savings even as household savings remained constant? The answer is straightforward. Even after rewarding their various stakeholders, including employees and shareholders, companies were left with ever-rising pool of retained earnings.

While at the firm level, this rising pool of retained earnings helped companies to dramatically scale up their investments; at the macro level it helped to keep the interest rates in check. From 2003 to 2008, India Inc’s retained earnings grew at a compounded annual growth (CAGR) of 25.1% against 20.1% growth in dividend payment and 16.6% in employee compensation.

Just imagine the situation if corporates were to borrow in the open market to finance their investment plans. It would have sent the interest rates soaring and nipped the investment boom in the bud, as happened in late 1990s.

The same danger is now lurking in background. The public sector savings, consolidated savings of PSUs and the government, is already under the threat of turning negative. If this happens under the weight of rising subsidies and other welfare measures, it will create a huge savings hole at the macro level.

In FY08, for instance, the total public sector savings accounted for 4.5% of the GDP or little over Rs 200,000 crore at current prices.

The even bigger danger is a decline in India Inc’s retained earnings due to a reduction in profitability. This is happening at a time when the need for funds is most acute. India Inc has the option of increasing profit retention by cutting down on dividend payouts. But given the relatively moderate dividend payout ratio in India, domestic companies on average pay only a quarter of their profits as dividends, it may not amount to much. And shareholders, including promoters, may not take it very pleasantly.

The other option is to look for foreign sources of funding. But given the potential size of the hole and the prevailing mood in global financial markets, this would be a tall order. In FY08, total savings of the private corporate sector amounted to 9% of India’s GDP or Rs 4,16,000 crore. In comparison, the net foreign investment in India was just Rs 65,000 crore in FY08. And even if we assume for a moment that foreign investment will become a large source of capital, India Inc may have to grapple with declining household savings.

Although the role of the household sector has declined in recent years, it still accounts for nearly two-third of the country’s gross savings. Due to its high base, one percentage point decline in household savings rate will create a $10 billion hole in the country’s savings pool. Amid the tough economic environment and worsening job market, this doesn’t look unlikely. The message is clear. Given the country’s capital output ratio of around 4, India will need to consistently maintain investment rate of over 36% if it aspires for an economic growth rate of around 9%. But this looks a tall order, given the recent developments on fiscal and corporate earnings fronts.

 

[Screaming Skull]

India attracts $2.34 bn FDI in first month of 2009-10​

23 Jun 2009,

NEW DELHI: India attracted $2.34 billion of foreign investments in April, a rise of 19.3 per cent over the previous month, signalling confidence
in the country's economy by foreign investors amid the global financial crisis.

However, as compared to April last year, foreign direct investment (FDI) in the first month of the fiscal 2009-10, was much lower.

"In April 2009, foreign inflows were $2.34 billion, about 19 per cent higher than March," an official said.

The inflows in April and March last fiscal were $3.74 billion and $1.96 billion, respectively.

Thanks to robust trends in the first six months of the last fiscal, total FDI in 2008-09 was $27.30 billion, against $24.5 billion in 2007-08.

Rating agency CRISIL Principal Economist D K Joshi said the current year would be difficult in the wake of the global economic downturn.

"Given the poor global economic scenario, the figures are not too discouraging but the year 2009-10 will be more challenging," Joshi said.

India had scaled down the FDI target by $five billion from $35 billion last fiscal. Cumulative FDI from April 2000 to March 2009 stands close to about $90 billion.